The Economic Impact of Travel on Tennessee Counties 2013

Transcription

1 The Economic Impact of Travel on Tennessee Counties 2013 A Study Prepared for the Tennessee Department of Tourist Development by the Research Department of the U.S. Travel Association Washington, D.C. September 2014

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3 Preface PREFACE This study was conducted by the Research Department of the U.S. Travel Association for the Tennessee Department of Tourist Development. The study provides preliminary 2013 and 2012 estimates of domestic and international traveler expenditures in Tennessee, as well as the employment, payroll income, and federal, state and local tax revenue directly generated by these expenditures. Total impact of travel on output, employment and payroll income (including indirect and induced impact) is also included. Additionally, this study provides estimates by county for domestic travel expenditures, as well as employment, payroll income, and state and local tax revenue directly generated by domestic travel. U.S. Travel Association Washington, D.C. September 2014 Note: The 2013 Economic Impact of Travel on Tennessee Counties report follows The Travel Economic Impact Model (TEIM) which developed by the U.S. Travel Association; jobs and payrolls supported by air couriers and tax revenue generated from air couriers are eliminated in this study.

4 Table of Contents TABLE OF CONTENTS INTRODUCTION... 1 EXECUTIVE SUMMARY... 2 TRAVEL IMPACT ON U.S. ECONOMY IN NATIONAL SUMMARY... 4 U.S. TRAVEL VOLUME IN TRAVEL EXPENDITURES IN TRAVEL EMPLOYMENT IN TRAVEL IMPACT ON TENNESSEE DIRECT TRAVEL EXPENDITURES DIRECT TRAVEL EXPENDITURE TRENDS DIRECT TRAVEL-GENERATED PAYROLL DIRECT TRAVEL-GENERATED EMPLOYMENT DIRECT TRAVEL-GENERATED TAX REVENUE MULTIPLIER IMPACT OF TRAVEL SPENDING IN TENNESSEE DOMESTIC TRAVEL IMPACT ON TENNESSEE COUNTIES IN COUNTY TABLES APPENDICES APPENDIX A: TRAVEL ECONOMIC IMPACT MODEL APPENDIX B: GLOSSARY OF TERMS APPENDIX C: TRAVEL-RELATED INDUSTRY MEASUREMENT APPENDIX D: SOURCES OF DATA APPENDIX E: RIMS II APPENDIX F: INDUSTRY RANKING BY EMPLOYMENT AND PAYROLL IN TENNESSEE,

5 List of Tables LIST OF TABLES Table 1: Overall U.S. Economic Indicators, Table 2: Travel Expenditures - U.S. Nationwide... 7 Table 3: Travel Generated Employment - U.S. Nationwide... 8 Table 4: U.S. Travel Forecasts... 9 Table 5: Direct Travel Expenditures in Tennessee by Industry Sector, Table 6: Direct Travel Expenditure Trends in Tennessee, Table 7: Direct Travel-Generated Payroll in Tennessee by Industry Sector, Table 8: Direct Travel-Generated Employment in Tennessee by Industry Sector, Table 9: Direct Travel-Generated Tax Revenue in Tennessee by Level of Government, Table 10: Multiplier Impact of Travel Spending in Tennessee, Table 11: Domestic Travel Impact in Tennessee - Top 5 Counties, 2012 and Table A: Alphabetical by County, Table B: Ranking of Counties by Expenditure Levels, Table C: Percent Distribution by County, Table D: Percent Change, 2013 Over Table E: Alphabetical by County, Table F: Alphabetical by Region, Table G: Change in Travel Spending from 2012 by Region Table H: Percent Change Over 2012 by Region Table I: Alphabetical by Region, Table J: Region Total, Table K: Region Total, Table L: Percent Change Over 2012 by Region Total... 65

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7 Introduction INTRODUCTION This report presents preliminary 2013 estimates of the impact of U.S. resident and international traveler spending in Tennessee, as well as the employment, payroll income and tax revenue directly generated by this spending. For the purpose of comparison, 2012 impact data are also included in this report. All estimates of the economic impact of travel contained in this volume are the product of the U.S. Travel Association's Travel Economic Impact Model (TEIM), a proprietary economic model developed expressly to indicate the expenditures, employment, payroll, and tax revenue generated by travel away from home in the United States. The TEIM was created to capture the highly complex nature of the U.S. travel industry at national, regional, state and local levels. The TEIM was designed so that economic impact estimates could be compared across all fifty states and the District of Columbia, thereby allowing states and localities to assess their market share nationally, regionally or within the state. The domestic component of TEIM is based on national surveys conducted by the U.S. Travel Association and other travel-related data developed by the U.S. Travel Association, various federal agencies and national travel organizations each year. A summary of the methodology is provided in Appendix B. The international traveler expenditure estimates are based on the Office of Travel and Tourism Industries (OTTI) In-Flight Survey and data provided to OTTI from Canada and Mexico. Other estimates of the economic impact of international visitors to the U.S. are generated by the TEIM by incorporating the estimated international travelers expenditures with the data series utilized to produce the domestic estimates. U.S. residents traveling in Tennessee include both state residents and out-of-state visitors traveling away from home overnight in paid accommodations, or on day or overnight trips to places 50 miles or more away from home. Travel commuting to and from work; travel by those operating an airplane, bus, truck, train or other form of common carrier transportation; military travel on active duty; and travel by students away at school are all excluded from the model. In addition, the payroll and employment estimates represent impact generated in the private sector and exclude public-supported payroll and employment. Since additional data relating to travel and its economic impact in 2013 will become available subsequent to this study, U.S. Travel Association reserves the right to revise these estimates in the future. 1

8 Executive Summary EXECUTIVE SUMMARY Total Impact of Travel Total domestic and international travel output in Tennessee, including direct, indirect and induced output, grew to $27.3 billion in 2013, a 3.4 percent increase from 2012, not adjusted for inflation. Total payroll income earned by domestic and international travel-supported employees reached nearly $5.7 billion in 2013, up 0.1 percent from Total employment in Tennessee supported by domestic and international traveler expenditures reached to 236,200 jobs in 2013, up 1.6 percent from Direct Impact of Domestic and International Travel Domestic and international travelers directly spent $16.7 billion in Tennessee during 2013, an increase of 3.4 percent from 2012, not adjusted by inflation. Payroll income, supported directly by domestic and international traveler spending in Tennessee, reached $3.3 billion during 2013, literally unchanged compared with Domestic and international traveler expenditures directly supported 148,700 jobs within Tennessee in 2013, up 1.7 percent from These jobs in Tennessee comprised 5.4 percent of total non-farm employment in the state during On average, every $112,411 spent in Tennessee by domestic and international travelers supported one job in the state in Domestic and international traveler spending in Tennessee directly generated more than $2.6 billion in tax revenue for federal, state and local governments in 2013, up 2.2 percent from Direct Impact of Domestic Travel In 2013, domestic travelers directly spent $16.2 billion in Tennessee, an increase of 3.3 percent from Payroll supported by domestic travel spending reached $3.2 billion in 2013, down slightly from

9 Executive Summary Domestic travel directly supported 143,500 jobs for Tennessee residents, up 1.6 percent from Tax revenue generated by domestic traveler spending for federal, state, and local governments totaled $2.5 billion, up 2.1 percent from Davidson County, including the city of Nashville, received nearly $5.0 billion in domestic traveler expenditures to lead all Tennessee counties during 2013, up 8.4 percent from Nineteen of Tennessee s 95 counties received over $100 million in domestic traveler expenditures in Domestic traveler spending directly supported one thousand jobs or more in thirteen counties during

10 Travel Impact on the U.S. Economy in 2013 TRAVEL IMPACT ON U.S. ECONOMY IN 2013 National Summary The U.S. recovery grew at a moderate pace in the first part of 2013 before achieving more robust economic growth in the second part. Real GDP in the United States (in chained 2009 dollars) increased 2.2 percent annually in 2013, slightly slower than the 2.3 percent increase in However, when looking at the year as two halves, one can see that the first two quarters were rebounds from a sputtering end of 2012, and the last two quarters highlighted stronger growth particularly in business investment and exports. For the year overall, consumer spending and service exports grew faster in 2013 than in These improvements, however, were more than offset by decelerations in investment spending and goods exports. As a result, the pace of real GDP growth in 2013 was only slightly slower than in 2012, despite the negative impacts of the third quarter government shutdown. The U.S. employment situation continued to improve as well: non-farm employment increased by 2.3 million to 136 million jobs, with total travel-related employment counted at 14.9 million in This indicates that one in nine U.S. non-farm jobs directly or indirectly relies on the travel industry. This includes 7.9 million jobs directly supported by traveler spending in 2013, and 7.0 million jobs supported by secondary effects of traveler spending, be it through indirect (e.g., utility use for restaurants) or induced (e.g., spending from travel industry employees) means. The Consumer Price Index (CPI) rose 1.5 percent in 2013 and U.S. Travel Association s Travel Price Index (TPI) increased at 0.9 percent during the same period. Decreased motor fuel price during 2013 is the major reason why the TPI grew at a slower rate than CPI. U.S. economic growth slowed in the first quarter of Real GDP, in chained 2009 dollar, contracted by 2.1 percent (annualized) in the first quarter of 2014, a drop from the 3.5 percent increase in the fourth quarter of The primary reasons for this contraction were the polar vortex freezing consumer spending, downward revisions to government spending after the lessthan-stellar rollout of the Affordable Care Act, and downward adjustments in business inventories. However, consumer spending in services has remained strong. Through the first seven months of 2014, the unemployment rate decreased to 6.1 percent in July, and a total of nearly 1.5 million jobs have been added since December In July 2014, both CPI and TPI increased 2.0 percent compared with July 2013; air fare decreased 0.2 percent and motor fuel prices increased 1.0 percent and during the same period. 4

11 Travel Impact on the U.S. Economy in 2013 Table 1: Overall U.S. Economic Indicators, Sector Nominal gross domestic product ($Billions) 15, , ,768.1 Real gross domestic product ($ Billions)* 15, , ,710.3 Real disposable personal income ($Billions)* 11, , ,637.0 Real personal consumption expenditures ($Billions)* 10, , ,727.9 Consumer price index** Travel Price Index Non-farm payroll employment (Millions) Unemployment rate (%) Percentage change from previous year Nominal gross domestic product 3.7% 4.2% 3.7% Real gross domestic product 1.6% 2.3% 2.2% Real disposable personal income 2.4% 2.0% 0.7% Real personal consumption expenditures 2.5% 2.2% 2.0% Consumer price index 3.2% 2.1% 1.5% Travel Price Index 6.5% 2.3% 0.9% Non-farm payroll employment 1.5% 1.7% 1.7% Source: BEA, BLS, U.S. Travel Association * In chained 2009 dollars ** =100 U.S. Travel Volume in 2013 U.S. domestic travel, including leisure and business travel increased 1.2 percent to a total of 2.1 billion person-trips in A person-trip is defined as one person on a trip away from home overnight in paid accommodations, or on a day or overnight trip to places 50 miles or more, oneway, away from home. Domestic leisure travel, which includes visits to friends and relatives as well as trips taken for outdoor recreation and entertainment purposes, increased 1.4 percent in 2013, totaling 1.6 billion person-trips and is forecasted to increase 1.7 percent in Leisure travel accounted for 78.4percent of all U.S. domestic travel in Domestic business travel grew 0.5 percent in 2013 to 445 million person-trips. International inbound travelers, including visitors from overseas, Canada and Mexico, made 69.8 million visits to the United States in 2013, up 4.2 percent from

12 Travel Impact on the U.S. Economy in 2013 Travel Expenditures in 2013 Domestic and international travel spending in the U.S. totaled $887.9 billion, a 3.9 percent increase from Leisure traveler spending totaled $621.4 billion and grew by 4.3 percent from Business travelers spending increased 3.2 percent over 2012 to $266.5 billion in Of this total, meeting and convention travelers spent $105.4 billion. Domestic travelers directly spent $748.3 billion in 2013, a 2.8 percent increase from This was the slowest increase during the current recovery period following the 2009 recession. Slower growth in 2013 was due to more moderate increases in both travel volume and travel prices than in prior years. Domestic travel expenditures are expected to accelerate in 2014 and increase 4.8 percent. International travelers spent $139.6 billion in the U.S. during 2013, up 10.6 percent from In addition, international travelers paid a total of $41.6 billion to U.S. air carriers on international passenger fares in 2012, an increase of 5.8 percent from As a result, a $57.1 billion travel trade surplus was generated in 2013, the largest surplus in the past 50 years and $9.7 billion greater than the 2012 travel trade surplus. Without the travel trade surplus, the U.S. trade balance deficit would be 12% higher than its current $474.9 billion. International traveler spending in the U.S. is estimated to increase 4.3 percent in Increasing for a fourth consecutive year, real travel spending (in chained 2009 dollars) rose 3.0 percent in The price of travel goods and services increased only slightly in 2013 (0.9%), according to the U.S. Travel Association s Travel Price Index (TPI). Motor fuel prices declined from previous year for the first year since The TPI is expected to increase 2.7 in

13 Travel Impact on the U.S. Economy in 2013 Table 2: Travel Expenditures - U.S. Nationwide 2012 Spending ($ Billions) 2013 Spending ($ Billions) Category Domestic Intl.* Total Domestic Intl.* Total Public Transportation $147.4 $14.2 $161.6 $152.6 $15.5 $168.0 Auto Transportation Lodging Foodservice Entertainment & Recreation General Retail Trade Total $728.0 $126.2 $854.2 $748.3 $139.6 $887.9 Source: U.S. Travel Association * Excludes international passenger fare payments. Changes of Direct Travel Expenditures* in the U.S., p 10.0% 8.0% 6.0% 4.0% 2.0% 7.2% 2.8% 8.3% 7.7% 6.5% 5.9% 4.7% 6.8% 8.7% 5.1% 3.9% 0.0% -2.0% -4.0% -6.0% -8.0% -10.0% % -5.1% -9.4% -12.0% Source: U.S. Travel Association. P: preliminary. * Excludes international passenger fare payments. 7

14 Travel Impact on the U.S. Economy in 2013 Travel Employment in 2013 The unemployment rate in the U.S. took another step down from its 9.6 percent peak in The 2013 unemployment rate dropped 0.7 percentage points from 2012 to 7.4 percent. Even with a 0.3 percent increase in the labor force, total non-farm employment in the U.S. increased 1.7 percent in This marks the third consecutive year of growth after three years of decline. In the current recovery, travel has proven to be one of the most efficient job-creating engines of the U.S. economy. Accounting for 5.8 percent of total non-farm employment in the U.S., travel directly supported nearly 7.9 million U.S. jobs in 2013, an increase of 2.4 percent from The travel industry has created jobs at a faster rate (6.8%) than the rest of the economy (5.8%) since the overall employment recovery began in March of Travel-generated jobs have accounted for is 8.2 percent of new jobs created in Table 3: Travel Generated Employment - U.S. Nationwide 2012 Employment (Thousands) 2013 Employment (Thousands) Category Domestic Intl.* Total Domestic Intl.* Total Public Transportation Auto Transportation Lodging 1, , , ,481.6 Foodservice 2, , , ,160.0 Entertainment & Recreation 1, , , ,341.9 General Retail Trade Travel Planning Total 6, , , , , ,861.7 Source: U.S. Travel Association * Excludes jobs supported by international passenger fare payments. 8

15 U.S. Travel Trends, Table 4: U.S. Travel Forecasts Real GDP ($ Billions) 14, , , , , , , , , ,709.0 Unemployment Rate (%) Consumer Price Index (CPI)* Travel Price Index (TPI) Total Travel Expenditures in U.S. ($ Billions) , ,075.1 U.S. Residents International Visitors** Total International Visitors to the U.S. (Millions) Overseas Arrivals the U.S. (Millions) Total Domestic Person-Trips (Millions) 1, , , , , , , , , ,193.1 Business Leisure 1, , , , , , , , , ,725.8 Percent Change from Previous Year (%) Real GDP Consumer Price Index (CPI)* Travel Price Index (TPI) Total Travel Expenditures in U.S U.S. Residents International Visitors** Total International Visitors to the U.S Overseas Arrivals the U.S Total Domestic Person-Trips Business Leisure Sources: U.S. Travel Association * =100. ** International traveler spending does not include international passenger fares. 9

16 Direct Travel Impact on the United States in 2013 Direct Travel Impact on the United States in 2013 Travel Expenditures $887.9 Billion Business Receipts Corporate Taxes Gross Receipts Tax Sales Tax Excise Tax Property Tax Payroll $209.5 Billion Payroll Taxes Tax Revenue $133.8 Billion Employees 7.9 Million Source: U.S. Travel Association, BEA *Does not include international passenger fare payments and other economic impact generated by these payments. 10

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18 Direct Travel Impact on Tennessee in 2013 TRAVEL IMPACT ON TENNESSEE 2013 Direct Travel Expenditures Travel spending in Tennessee by both domestic and international travelers reached $16.7 billion on transportation, lodging, food, entertainment and recreation and general retail trade, up 3.4 percent from In 2013, foodservice, the largest domestic traveler spending sector in Tennessee, reached $5.0 billion and accounted for nearly one third (31.0%) of the state total domestic travel expenditures. Domestic traveler spending on auto transportation ranked second with more than $3.4 billion in 2013, up 3.4 percent from Lodging accounted for 17.4 percent of the domestic total at $2.8 billion. Smith Travel Research data show that total hotel room demand decreased 2.5 percent from 2012, while total room revenue increased 7.4 percent. Direct Domestic Travel Expenditures in Tennessee by Industry Sector, 2013 Entertainment & Recreation 10.7% General Retail Trade 10.5% Public Transportation 9.2% Auto Transportation 21.2% Foodservice 31.0% Lodging 17.4% 1. Auto transportation sector includes privately-owned vehicles that are used for trips (e.g., automobiles, trucks, campers or other recreational vehicles), gasoline service stations, and automotive rental. 2. Foodservice sector includes restaurants, grocery stores and other eating and drinking establishments. 3. Public transportation sector comprises air, intercity bus, rail, boat or ship, and taxicab or limousine service. 4. Lodging sector consists of hotels and motels, campgrounds, and ownership or rental of vacation or second homes. 5. General retail trade sector includes gifts, clothes, souvenirs and other incidental retail purchases. 6. Entertainment and recreation sector includes amusement parks and attractions, attendance at nightclubs, movies, legitimate shows, sports events, and other forms of entertainment and recreation while traveling. 12

19 Direct Travel Expenditures Table 5: Direct Travel Expenditures in Tennessee by Industry Sector, Expenditures Domestic ($ Millions) % of Domestic Total Domestic Travel Public Transportation $1, % Auto Transportation 3, % Lodging 2, % Foodservice 5, % Entertainment & Recreation 1, % General Retail Trade 1, % Domestic Total $16, % International Total $531.6 Grand Total $16, Expenditures Domestic Travel Public Transportation $1, % Auto Transportation 3, % Lodging 2, % Foodservice 4, % Entertainment & Recreation 1, % General Retail Trade 1, % Domestic Total $15, % International Total $497.0 Grand Total $16,157.4 Percentage Change 2013 over 2012 Domestic Travel Public Transportation -6.3% Auto Transportation 3.4% Lodging 6.8% Foodservice 4.0% Entertainment & Recreation 4.7% General Retail Trade 3.8% Domestic Total 3.3% International Total 7.0% Grand Total 3.4% Source: U.S. Travel Association, OTTI/ITA 13

20 Direct Travel Impact on Tennessee in 2013 TRAVEL IMPACT ON TENNESSEE, Direct Travel Expenditure Trends From 2003 to 2013, total nominal direct travel expenditures in Tennessee increased 57.6 percent in line with the nationwide growth during the same period. From 2003 to 2007, travel spending in Tennessee grew steadily, rebounding from the shocks caused by the 2001 terrorist attacks and the 2002 recession. The economic recession that started in December 2007 slowed traveler spending growth in 2009 to 1.5 percent. The impact of the recession had an aftershock in 2010; sharply falling motor fuel prices in particular caused a 7.5 percent decline in traveler spending. The market rebounded soon after, jumping up 15.5 percent in 2011 and moderated back down to 3.4 percent growth in Changes in Total Direct and International Expenditures in Tennessee, % 15% 10% 5% 0% -5% 1.0% % % % % % % % % % % -7.5% $10.6 Total Direct and International Expenditures in Tennessee, (current $ billion) $10.9 $11.5 $12.4 $13.4 $14.2 $14.4 $13.3 $15.4 $16.2 $

21 Direct Travel Expenditure Trends, Table 6: Direct Travel Expenditure Trends in Tennessee, Domestic Travel Spending Percent Change From Previous Year Tennessee U.S. Market Tennessee U.S. Year ($ Millions) ($ Millions) Share (%) (%) (%) , , % 3.3% 2.8% , , % 5.0% 4.5% , , % 15.3% 8.2% , , % -7.8% 6.3% , , % 1.7% -8.5% , , % 6.1% 3.4% , , % 7.6% 4.9% , , % 8.2% 6.8% , , % 5.5% 7.6% , , % 2.7% 7.4% , , % 1.7% 3.7% International Travel Spending Percent Change From Previous Year Tennessee U.S. Market Tennessee U.S. Year ($ Millions) ($ Millions) Share (%) (%) (%) , % 7.0% 10.6% , % 10.4% 8.7% , % 22.4% 12.2% , % 4.1% 9.9% , % -2.4% -14.7% , % 0.0% 13.4% , % 5.3% 13.0% , % 10.2% 4.9% , % 15.5% 8.9% , % -13.2% 15.8% , % -18.4% -3.3% Total Travel Spending Percent Change From Previous Year Tennessee U.S. Market Tennessee U.S. Year ($ Millions) ($ Millions) Share (%) (%) (%) , , % 3.4% 3.9% , , % 5.2% 5.1% , , % 15.5% 8.7% , , % -7.5% 6.8% , , % 1.5% -9.4% , , % 5.9% 4.7% , , % 7.6% 5.9% , , % 8.3% 6.5% , , % 5.8% 7.7% , , % 2.3% 8.3% , , % 1.0% 2.8% Sources: U.S. Travel Association, OTTI/ITA and BEA 15

22 Direct Travel Impact on Tennessee TRAVEL IMPACT ON TENNESSEE 2013 Direct Travel-Generated Payroll Travel-generated payroll is the wage and salary income paid to employees directly serving the traveler within the industry sectors from which these travelers purchase goods and services. Each dollar spent on travel generates different amounts of payroll income within the various travel industry sectors depending on the labor content and the wage structure of each sector. In 2013, total salary and wages paid by Tennessee travel-related firms and directly attributable to domestic and international traveler spending was literally unchanged compared with 2012 at $3.3 billion. The foodservice sector posted the largest payroll generated by domestic travel spending in 2013, with close to $1.2 billion paid to employees, up 3.5 percent from Despite an 8.4 percent decline in 2013, the public transportation sector maintained the second-highest payroll generated by domestic travel spending, totaling $573.6 million and accounting for 17.9 percent of the state domestic total. The travel planning sector reported the largest domestic payroll percentage increase over 2013, up 12.3 percent and totaling $92.9 million. Direct Domestic Travel-Generated Payroll in Tennessee by Industry Sector, 2013 General Retail Travel Planning Trade 2.9% 8.2% Public Transportation 17.9% Entertainment & Recreation 17.2% Auto Transportation 3.3% Lodging 14.5% Foodservice 35.9% 16

23 Direct Travel-Generated Payroll Table 7: Direct Travel-Generated Payroll in Tennessee by Industry Sector, Payroll Domestic ($ Millions) % of Domestic Total Domestic Travel Public Transportation $ % Auto Transportation % Lodging % Foodservice 1, % Entertainment & Recreation % General Retail Trade % Travel Planning * % Domestic Total $3, % International Total $117.6 Grand Total $3, Payroll Domestic Travel Public Transportation $ % Auto Transportation % Lodging % Foodservice 1, % Entertainment & Recreation % General Retail Trade % Travel Planning * % Domestic Total $3, % International Total $113.7 Grand Total $3,318.0 Percentage Change, 2012 over 2011 Domestic Travel Public Transportation -8.4% Auto Transportation 1.1% Lodging -4.3% Foodservice 3.5% Entertainment & Recreation 3.3% General Retail Trade 0.6% Travel Planning * 12.3% Domestic Total -0.1% International Total 3.4% Grand Total 0.0% Source: U.S. Travel Association Note: * Refers to payroll income that goes to travel agents, tour operators, and other travel service employees who arrange passenger transportation, lodging, tours and other related services. 17

24 Direct Travel Impact on Tennessee TRAVEL IMPACT ON TENNESSEE 2013 Direct Travel-Generated Employment The most impressive contribution that travel and tourism makes to the Tennessee economy is the number of businesses and jobs it supports. These jobs include a large number of executive and managerial positions, as well as service-oriented occupations. During 2013, domestic and international traveler spending in Tennessee supported 148,700 jobs, including full-time and seasonal/part-time positions in the state, up 1.7 percent from On average, every $112,411 spent by domestic and international travelers in Tennessee directly supported one job. It is important to note that these domestic and international traveler spending supported jobs comprised 5.4 percent of total non-agricultural employment in Tennessee during Without these jobs, Tennessee s 2013 unemployment rate of 8.2 percent would have been 4.8 percentage points higher, or the equivalent of 13.0 percent of the labor force. Within the travel industry, the foodservice sector, which includes restaurants and other eating and drinking places, provided more jobs than any other industry sector. During 2013, domestic traveler spending in this sector supported 75,300 jobs, accounting for 52.5 percent of the state total. The labor-intensiveness of these businesses and the large proportion of travel expenditures spent on food service contribute to the importance of this sector. Direct Domestic Travel-Generated Employment in Tennessee by Industry Sector, 2013 General Retail Trade 9.2% Entertainment & Recreation 11.6% Travel Planning 1.4% Public Transportation 7.1% Auto Transportation 2.5% Lodging 15.7% Foodservice 52.5% 18

25 Direct Travel-Generated Employment Table 8: Direct Travel-Generated Employment in Tennessee by Industry Sector, Employment Domestic (Thousands) % of Domestic Total Domestic Travel Public Transportation % Auto Transportation % Lodging % Foodservice % Entertainment & Recreation % General Retail Trade % Travel Planning * % Domestic Total % International Total 5.2 Grand Total Employment Domestic Travel Public Transportation % Auto Transportation % Lodging % Foodservice % Entertainment & Recreation % General Retail Trade % Travel Planning * % Domestic Total % International Total 4.9 Grand Total Percentage Change, 2013 over 2012 Domestic Travel Public Transportation -11.2% Auto Transportation 3.3% Lodging -0.5% Foodservice 4.1% Entertainment & Recreation 2.1% General Retail Trade 0.6% Travel Planning * 8.3% Domestic Total 1.6% International Total 5.2% Grand Total 1.7% Source: U.S. Travel Association Note: * Refers to jobs created in travel arrangement firms such as travel agencies, wholesale and retail tour companies, and other travel-related service businesses. 19

26 Direct Travel Impact on Tennessee TRAVEL IMPACT ON TENNESSEE 2013 Direct Travel-Generated Tax Revenue Travel tax receipts are the federal, state and local tax revenues attributable to travel spending in Tennessee. Travel-generated tax revenue is a significant economic benefit, as governments use these funds to support the travel infrastructure and help support a variety of public programs. In 2013, total tax revenue generated by domestic and international traveler spending in Tennessee reached $2.6 billion, an increase of 2.2 percent compared to Domestic traveler spending in Tennessee generated more than $1.2 billion for the federal government in 2013, down slightly from This represents nearly half (48.8%) of all domestic travel-generated tax collections in the state. Each dollar spent by domestic travelers in Tennessee produced 7.6 cents for federal tax coffers. Spending by domestic travelers in Tennessee also generated $823.4 million in tax revenue for the state treasury through state sales and excise taxes, and taxes on personal and corporate income, up 4.8 percent from This composed nearly one-third (32.7%) of all domestic travel-generated tax revenue collected in the state for On average, each domestic travel dollar produced 5.1 cents in state tax receipts. Local governments in Tennessee directly benefited from travel as well. During 2013, domestic traveler spending generated $466.1 million in sales and property tax revenue for localities, up 3.4 percent from This represents 18.5 percent of total domestic travelgenerated tax revenue in the state. Each domestic travel dollar produced nearly 2.9 cents for local tax coffers. Direct Domestic Travel-Generated Tax Revenue in Tennessee by Industry Sector, 2013 Local 18.5% Federal 48.8% State 32.7% 20

27 Direct Travel-Generated Tax Revenue Table 9: Direct Travel-Generated Tax Revenue in Tennessee by Level of Government, Tax Revenue Domestic ($ Millions) % of Domestic Total Domestic Travel Federal $1, % State % Local % Domestic Total $2, % International Total $98.4 Grand Total $2, Tax Revenue Domestic Travel Federal $1, % State % Local % Domestic Total $2, % International Total $93.1 Grand Total $2,561.8 Percentage Change, 2013 over 2012 Domestic Travel Federal -0.1% State 4.8% Local 3.4% Domestic Total 2.1% International Total 5.7% Grand Total 2.2% Sources: U.S. Travel Association 21

28 Multiplier Impact of Travel Spending in Tennessee MULTIPLIER IMPACT OF TRAVEL SPENDING IN TENNESSEE Travelers in Tennessee produce secondary impacts over and above that of their original expenditures previously detailed. These secondary outputs (sales) and earnings (wage and salary income) arise from indirect and induced spending. Indirect impact occurs as travel industry business operators, such as restaurants, purchase goods, such as food and beverages, and services, such as electricity and building maintenance, from local suppliers. These purchases generate additional output or sales indirectly. Induced impact occurs as a result of the employees of businesses, and their suppliers, spending part of their earnings in the area. This spending itself generates sales additional to the indirect impact. The sum of the indirect and induced effects comprises the total secondary impact of traveler expenditures in the area. The ratio of the sum of primary output generated (travel spending) plus secondary output to initial expenditures alone is commonly termed the sales or output multiplier. During the secondary impact process, wage and salary income (earnings) are generated in addition to that produced by the initial travel expenditures as the suppliers employ labor to produce the additional output. The earnings multiplier is the ratio of the total primary and secondary earnings generated by the initial travel spending to that spending. Just as additional earnings are created, employment is also generated during the secondary impact process. The employment multiplier represents the number of jobs provided, directly and indirectly, for each one million dollars of output or expenditures generated. Table 10 summarizes the direct, indirect and induced, and total impacts of domestic and international travel spending on the Tennessee economy during 2012 and In 2013, the $16.7 billion spent directly by domestic and international travelers in Tennessee generated a total output value of $27.3 billion, a 3.4 percent increase compared with The ratio of the total output to the initial spending is 1.63, the output multiplier. This indicates that the average travel dollar generated an additional 63 cents in secondary sales for a total impact of $1.63. In addition to over $3.3 billion in payroll income supported by direct domestic and international travelers spending, close to $2.4 billion in earnings was produced in secondary impact during The ratio of total earnings generated to the initial spending is 0.34, the earnings multiplier. Each dollar of domestic and international travelers expenditures generated 34 cents in total earnings in the Tennessee economy. Travel produced a total of 233,200 jobs for Tennessee residents, including direct and secondary employment in travel industry and other industries of the Tennessee economy. The ratio of total employment to the initial direct spending is 14, the employment multiplier. This means that every million dollars in domestic and international travel expenditures supported a total of 14 jobs in Tennessee during

29 Multiplier Impact of Travel Spending in Tennessee Table 10: Multiplier Impact of Travel Spending in Tennessee, Multiplier Impact Indirect & Impact Measure Direct Impact Induced Impact Total Impact Expenditures ($ millions) $16,714.6 $10,600.8 $27,315.3 Earnings ($ millions) $3,318.0 $2,365.8 $5,683.8 Employment (thousands) Multiplier Impact Expenditures ($ millions) $16,157.4 $10,263.7 $26,421.2 Earnings ($ millions) $3,318.0 $2,361.3 $5,679.3 Employment (thousands) Percent Change 2013 over 2012 Expenditures 3.4% 3.3% 3.4% Earnings 0.0% 0.2% 0.1% Employment 1.7% 1.5% 1.6% Sources: U.S. Department of Commerce, Bureau of Economic Analysis, RIMS II; IMPLAN; U.S. Travel Association 23

30 Domestic Travel Impact on Tennessee Counties in 2013 DOMESTIC TRAVEL IMPACT ON TENNESSEE COUNTIES IN 2013 During 2013, travel-related expenditures occurred throughout all ninety-five counties of Tennessee. Domestic travelers spent nearly $16.2 billion while traveling in Tennessee, up 3.3 percent from The $16.2 billion of domestic traveler spending in Tennessee directly supported $3.2 billion in payroll and 143,500 jobs. Additionally, domestic traveler spending in Tennessee generated $823.4 million in tax revenue for the state treasury and $466.1 million tax revenue for local governments during Domestic Travel Impact in Top Five Counties The top five counties in Tennessee received more than $11.6 billion in direct domestic travel expenditures, 72.0 percent of the state total. The top five counties also earned close to $2.5 billion in payroll (76.6 percent of the state total) and 109,400 jobs (76.2 percent of the state total) in Additionally, domestic travel in the top five counties generated $568.0 million in tax revenue for the state treasury and $303.6 million tax revenue for local governments during Davidson County, which includes the city of Nashville, led all counties in Domestic traveler expenditures in Davidson County registered nearly $5.0 billion, accounting for 30.8 percent of the state total. More than $1.1 billion in payroll income and 54,800 jobs were supported in this county. Shelby County, which includes the city of Memphis, ranked second with $3.0 billion in domestic travel spending in 2013, representing 18.7 percent of the state total. The county's payroll income of $539.5 million was paid to 20,400 workers. Sevier County posted nearly $1.8 billion in domestic expenditures to rank third. These expenditures supported $382.8 million in payroll as well as 18,800 jobs within the county. Hamilton County ranked fourth with $934.6 million in domestic travel expenditures, $91.1 million in payroll income and 5,900 jobs within the county in Knox County received $930.7 million from domestic travelers, 5.8 percent of the state total. This county benefited from $292.1 million in payroll and 9,500 jobs. 24

31 Top Five Counties, 2012 and 2013 Table 11: Domestic Travel Impact in Tennessee - Top 5 Counties, 2012 and Impact State Tax Local Tax Expenditures Payroll Employment Receipts Receipts County ($ Millions) ($ Millions) (Thousands) ($ Millions) ($ Millions) DAVIDSON $4,992.1 $1, $234.8 $126.3 SHELBY 3, SEVIER 1, HAMILTON KNOX Top Five Total $11,645.1 $2, $568.0 $303.6 State Total $16,183.0 $3, $823.4 $466.1 Share of Top 5 Counties 72.0% 76.6% 76.2% 69.0% 65.1% 2012 Impact DAVIDSON $4,606.8 $1, $216.4 $116.0 SHELBY 3, SEVIER 1, HAMILTON KNOX Top Five Total $11,261.8 $2, $539.0 $292.9 State Total $15,660.5 $3, $785.7 $451.0 Share of Top 5 Counties 71.9% 76.6% 76.2% 68.6% 64.9% Percent Change 2013 Over 2012 DAVIDSON 8.4% 3.2% 4.6% 8.5% 8.8% SHELBY -3.6% -7.0% -5.5% 3.0% -3.2% SEVIER 4.0% 0.5% 2.0% 4.3% 4.4% HAMILTON 2.0% -0.7% 0.5% 2.2% 2.4% KNOX 2.9% -0.2% 1.0% 3.1% 3.3% Top Five Total 3.4% -0.2% 1.6% 5.4% 3.7% State Total 3.3% -0.1% 1.6% 4.8% 3.4% Source: U.S. Travel Association 25

32 County Tables COUNTY TABLES The following tables list the results of the County Economic Impact Component of the U.S. Travel Association s Travel Economic Impact Model for Tennessee in 2012 and The estimates presented are for direct domestic traveler expenditures and related economic impact. Table A shows the counties listed alphabetically, with 2013 travel expenditures, travelgenerated payroll and employment, and state tax revenue and the local tax revenue for each. Table B ranks the counties in order of 2013 travel expenditures from highest to lowest. Table C indicates the percent of the state totals accounted for by each county in Table D shows the percent change in 2013 over 2012 estimates for each of the measures of economic impact. Table E shows the counties, listed alphabetically, with 2012 travel expenditures, travelgenerated payroll and employment, and state tax revenue and local tax revenue shown for each. Table F shows the counties grouped by region with each measure of travel impact in Table G indicates the counties grouped by region with 2013 and 2012 travel expenditures, shown with the percent change in 2013 over Table H shows the percent change in 2013 over 2012 estimates, with the counties grouped by region. Table I indicates the counties grouped by region, with 2012 estimates for each measure of travel impact. Table J shows each measure of travel impact for each region in Table K shows each measure of travel impact with 2012 estimates by each region. Table L indicates the percent change in each measure of travel impact in 2013 over 2012 for each Tennessee region. 26

33 Table A: Alphabetical by County, 2013 Table A: Alphabetical by County, 2013 State Tax Local Tax Expenditures Payroll Employment Receipts Receipts County ($ Millions) ($ Millions) (Thousands) ($ Millions) ($ Millions) ANDERSON $ $ $6.42 $2.38 BEDFORD BENTON BLEDSOE BLOUNT BRADLEY CAMPBELL CANNON CARROLL CARTER CHEATHAM CHESTER CLAIBORNE CLAY COCKE COFFEE CROCKETT CUMBERLAND DAVIDSON 4, , DECATUR DEKALB DICKSON DYER FAYETTE FENTRESS FRANKLIN GIBSON

34 Table A: Alphabetical by County, 2013 Table A: Alphabetical by County, 2013 (Continued) State Tax Local Tax Expenditures Payroll Employment Receipts Receipts County ($ Millions) ($ Millions) (Thousands) ($ Millions) ($ Millions) GILES $22.45 $ $1.32 $0.96 GRAINGER GREENE GRUNDY HAMBLEN HAMILTON HANCOCK HARDEMAN HARDIN HAWKINS HAYWOOD HENDERSON HENRY HICKMAN HOUSTON HUMPHREYS JACKSON JEFFERSON JOHNSON KNOX LAKE LAUDERDALE LAWRENCE LEWIS LINCOLN LOUDON MCMINN

35 Table A: Alphabetical by County, 2013 Table A: Alphabetical by County, 2013 (Continued) State Tax Local Tax Expenditures Payroll Employment Receipts Receipts County ($ Millions) ($ Millions) (Thousands) ($ Millions) ($ Millions) MCNAIRY $10.90 $ $0.60 $0.60 MACON MADISON MARION MARSHALL MAURY MEIGS MONROE MONTGOMERY MOORE MORGAN OBION OVERTON PERRY PICKETT POLK PUTNAM RHEA ROANE ROBERTSON RUTHERFORD SCOTT SEQUATCHIE SEVIER 1, SHELBY 3, SMITH STEWART

36 Table A: Alphabetical by County, 2013 Table A: Alphabetical by County, 2013 (Continued) State Tax Local Tax Expenditures Payroll Employment Receipts Receipts County ($ Millions) ($ Millions) (Thousands) ($ Millions) ($ Millions) SULLIVAN $ $ $17.20 $8.95 SUMNER TIPTON TROUSDALE UNICOI UNION VAN BUREN WARREN WASHINGTON WAYNE WEAKLEY WHITE WILLIAMSON WILSON STATE TOTALS $16, $3, $ $ U.S. Travel Association 30

37 Table B: Ranking of Counties by Expenditure Levels, 2013 Table B: Ranking of Counties by Expenditure Levels, 2013 State Tax Local Tax Expenditures Payroll Employment Receipts Receipts County ($ Millions) ($ Millions) (Thousands) ($ Millions) ($ Millions) DAVIDSON $4, $1, $ $ SHELBY SEVIER HAMILTON KNOX WILLIAMSON SULLIVAN BLOUNT RUTHERFORD WASHINGTON MONTGOMERY MADISON WILSON BRADLEY SUMNER ANDERSON PUTNAM MAURY CUMBERLAND HAMBLEN GREENE COFFEE ROANE DICKSON JEFFERSON HENRY DYER

38 Table B: Ranking of Counties by Expenditure Levels, 2013 Table B: Ranking of Counties by Expenditure Levels, 2013 (Continued) State Tax Local Tax Expenditures Payroll Employment Receipts Receipts County ($ Millions) ($ Millions) (Thousands) ($ Millions) ($ Millions) LOUDON $51.73 $ $3.00 $1.30 OBION CAMPBELL ROBERTSON GIBSON COCKE MCMINN DEKALB LAWRENCE HARDIN HAWKINS MONROE CARTER HUMPHREYS TIPTON MARION RHEA POLK BEDFORD HENDERSON BENTON HARDEMAN WARREN GILES LINCOLN MARSHALL FRANKLIN